Yvanova v. New Century Mortgage Corp.

, 021816 CASC, S218973

TSVETANA YVANOVA, Plaintiff and Appellant,
v.
NEW CENTURY MORTGAGE CORPORATION et al., Defendants and Respondents.
S218973
Supreme Court of California
February 18, 2016
Los Angeles County Superior Court No. LC097218, Russell S. Kussman Judge.
Tsvetana Yvanova, in pro. per.; Law Offices of Richard L. Antognini and Richard L.
Antognini for Plaintiff and Appellant.
Law Office of Mark F. Didak and Mark F. Didak as Amici Curiae on behalf of Plaintiff and
Appellant.
Kamala D. Harris, Attorney General, Nicklas A. Akers, Assistant Attorney General, Michele
Van Gelderen and Sanna R. Singer, Deputy Attorneys General, for Attorney General of California
as Amicus Curiae on behalf of Plaintiff and Appellant.
Lisa R. Jaskol; Kent Qian; and Hunter Landerholm for Public Counsel, National Housing
Law Project and Neighborhood Legal Services of Los Angeles County as Amici Curiae on behalf
of Plaintiff and Appellant.
The Sturdevant Law Firm and James C. Sturdevant for National Association of Consumer
Advocates and National Consumer Law Center as Amici Curiae on behalf of Plaintiff and
Appellant.
The Arkin Law Firm, Sharon J. Arkin; Arbogast Law and David M. Arbogast for Consumer
Attorneys of California as Amicus Curiae on behalf of Plaintiff and Appellant.
Houser & Allison, Eric D. Houser, Robert W. Norman, Jr., Patrick S. Ludeman; Bryan Cave,
Kenneth Lee Marshall, Nafiz Cekirge, Andrea N. Winternitz and Sarah Samuelson for Defendants
and Respondents.
Pfeifer & De La Mora and Michael R. Pfeifer for California Mortgage Bankers Association as
Amicus Curiae on behalf of Defendants and Respondents.
Denton U.S. and Sonia Martin for Structured Finance Industry Group, Inc., as Amicus
Curiae on behalf of Defendants and Respondents.
Goodwin Proctor, Steven A. Ellis and Nicole S. Tate-Naghi for California Bankers
Association as Amicus Curiae on behalf of Defendants and Respondents.
Wright, Finlay & Zak and Jonathan D. Fink for American Legal & Financial Network and
United Trustees Association as Amici Curiae on behalf of Defendants and Respondents.
WERDEGAR, J.
The collapse in 2008 of the housing bubble and its accompanying system of home loan
securitization led, among other consequences, to a great national wave of loan defaults and
foreclosures. One key legal issue arising out of the collapse was whether and how defaulting
homeowners could challenge the validity of the chain of assignments involved in securitization of
their loans. We granted review in this case to decide one aspect of that question: whether the
borrower on a home loan secured by a deed of trust may base an action for wrongful foreclosure

on allegations a purported assignment of the note and deed of trust to the foreclosing party bore
defects rendering the assignment void.
The Court of Appeal held plaintiff Tsvetana Yvanova could not state a cause of action for
wrongful foreclosure based on an allegedly void assignment because she lacked standing to
assert defects in the assignment, to which she was not a party. We conclude, to the contrary, that
because in a nonjudicial foreclosure only the original beneficiary of a deed of trust or its assignee
or agent may direct the trustee to sell the property, an allegation that the assignment was void,
and not merely voidable at the behest of the parties to the assignment, will support an action for
wrongful foreclosure.
Our ruling in this case is a narrow one. We hold only that a borrower who has suffered a
nonjudicial foreclosure does not lack standing to sue for wrongful foreclosure based on an
allegedly void assignment merely because he or she was in default on the loan and was not a
party to the challenged assignment. We do not hold or suggest that a borrower may attempt to
preempt a threatened nonjudicial foreclosure by a suit questioning the foreclosing partys right to
proceed. Nor do we hold or suggest that plaintiff in this case has alleged facts showing the
assignment is void or that, to the extent she has, she will be able to prove those facts. Nor, finally,
in rejecting defendants arguments on standing do we address any of the substantive elements of
the wrongful foreclosure tort or the factual showing necessary to meet those elements.
Factual and Procedural Background
This case comes to us on appeal from the trial courts sustaining of a demurrer. For
purposes of reviewing a demurrer, we accept the truth of material facts properly pleaded in the
operative complaint, but not contentions, deductions, or conclusions of fact or law. We may also
consider matters subject to judicial notice. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)[1] To
determine whether the trial court should, in sustaining the demurrer, have granted the plaintiff
leave to amend, we consider whether on the pleaded and noticeable facts there is a reasonable
possibility of an amendment that would cure the complaints legal defect or defects. (Schifando v.
City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
In 2006, plaintiff executed a deed of trust securing a note for $483, 000 on a residential
property in Woodland Hills, Los Angeles County. The lender, and beneficiary of the trust deed,
was defendant New Century Mortgage Corporation (New Century). New Century filed for
bankruptcy on April 2, 2007, and on August 1, 2008, it was liquidated and its assets were
transferred to a liquidation trust.
On December 19, 2011, according to the operative complaint, New Century (despite its
earlier dissolution) executed a purported assignment of the deed of trust to Deutsche Bank
National Trust, as trustee of an investment loan trust the complaint identifies as Msac-2007 Trust
He 1 Pass Thru Certificates. We take notice of the recorded assignment, which is in the appellate
record. (See fn. 1, ante.) As assignor the recorded document lists New Century; as assignee it
lists Deutsche Bank National Trust Company (Deutsche Bank) as trustee for the registered holder
of Morgan Stanley ABS Capital I Inc. Trust 2007 HE1 Mortgage Pass-Through Certificates, Series
2007 HE1 (the Morgan Stanley investment trust). The assignment states it was prepared by
Ocwen Loan Servicing, LLC, which is also listed as the contact for both assignor and assignee

and as the attorney in fact for New Century. The assignment is dated December 19, 2011, and
bears a notation that it was recorded December 30, 2011.
According to the complaint, the Morgan Stanley investment trust to which the deed of trust
on plaintiffs property was purportedly assigned on December 19, 2011, had a closing date (the
date by which all loans and mortgages or trust deeds must be transferred to the investment pool)
of January 27, 2007.
On August 20, 2012, according to the complaint, Western Progressive, LLC, recorded two
documents: one substituting itself for Deutsche Bank as trustee, the other giving notice of a
trustees sale. We take notice of a substitution of trustee, dated February 28, 2012, and recorded
August 20, 2012, replacing Deutsche Bank with Western Progressive, LLC, as trustee on the deed
of trust, and of a notice of trustees sale dated August 16, 2012, and recorded August 20, 2012.
A recorded trustees deed upon sale dated December 24, 2012, states that plaintiffs
Woodland Hills property was sold at public auction on September 14, 2012. The deed conveys the
property from Western Progressive, LLC, as trustee, to the purchaser at auction, THR California
LLC, a Delaware limited liability company.
Plaintiffs second amended complaint, to which defendants demurred, pleaded a single count
for quiet title against numerous defendants including New Century, Ocwen Loan Servicing, LLC,
Western Progressive, LLC, Deutsche Bank, Morgan Stanley Mortgage Capital, Inc., and the
Morgan Stanley investment trust. Plaintiff alleged the December 19, 2011, assignment of the deed
of trust from New Century to the Morgan Stanley investment trust was void for two reasons: New
Centurys assets had previously, in 2008, been transferred to a bankruptcy trustee; and the
Morgan Stanley investment trust had closed to new loans in 2007. (The demurrer, of course, does
not admit the truth of this legal conclusion; we recite it here only to help explain how the
substantive issues in this case were framed.) The superior court sustained defendants demurrer
without leave to amend, concluding on several grounds that plaintiff could not state a cause of
action for quiet title.
The Court of Appeal affirmed the judgment for defendants on their demurrer. The pleaded
cause of action for quiet title failed fatally, the court held, because plaintiff did not allege she had
tendered payment of her debt. The court went on to discuss the question, on which it had sought
and received briefing, of whether plaintiff could, on the facts alleged, amend her complaint to plead
a cause of action for wrongful foreclosure.
On the wrongful foreclosure question, the Court of Appeal concluded leave to amend was
not warranted. Relying on Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497 (
Jenkins), the court held plaintiffs allegations of improprieties in the assignment of her deed of trust
to Deutsche Bank were of no avail because, as an unrelated third party to that assignment, she
was unaffected by such deficiencies and had no standing to enforce the terms of the agreements
allegedly violated. The court acknowledged that plaintiffs authority, Glaski v. Bank of America,
supra, 218 Cal.App.4th 1079 (Glaski), conflicted with Jenkins on the standing issue, but the court
agreed with the reasoning of Jenkins and declined to follow Glaski.
We granted plaintiffs petition for review, limiting the issue to be briefed and argued to the
following: In an action for wrongful foreclosure on a deed of trust securing a home loan, does the

borrower have standing to challenge an assignment of the note and deed of trust on the basis of
defects allegedly rendering the assignment void?
Discussion
I. Deeds of Trust and Nonjudicial Foreclosure
A deed of trust to real property acting as security for a loan typically has three parties: the
trustor (borrower), the beneficiary (lender), and the trustee. The trustee holds a power of sale. If
the debtor defaults on the loan, the beneficiary may demand that the trustee conduct a nonjudicial
foreclosure sale. (Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, 813.) The nonjudicial
foreclosure system is designed to provide the lender-beneficiary with an inexpensive and efficient
remedy against a defaulting borrower, while protecting the borrower from wrongful loss of the
property and ensuring that a properly conducted sale is final between the parties and conclusive
as to a bona fide purchaser. (Moeller v. Lien (1994) 25 Cal.App.4th 822, 830.)
The trustee starts the nonjudicial foreclosure process by recording a notice of default and
election to sell. (Civ. Code, 2924, subd. (a)(1).)[2] After a three month waiting period, and at
least 20 days before the scheduled sale, the trustee may publish, post, and record a notice of sale.
( 2924, subd. (a)(2), 2924f, subd. (b).) If the sale is not postponed and the borrower does not
exercise his or her rights of reinstatement or redemption, the property is sold at auction to the
highest bidder. ( 2924g, subd. (a); Jenkins, supra, 216 Cal.App.4th at p. 509; Moeller v. Lien,
supra, 25 Cal.App.4th at pp. 830831.) Generally speaking, the foreclosure sale extinguishes the
borrowers debt; the lender may recover no deficiency. (Code Civ. Proc., 580d; Dreyfuss v.
Union Bank of California (2000) 24 Cal.4th 400, 411.)
The trustee of a deed of trust is not a true trustee with fiduciary obligations, but acts merely
as an agent for the borrower-trustor and lender-beneficiary. (Biancalana v. T.D. Service Co., supra
, 56 Cal.4th at p. 819; Vournas v. Fidelity Nat. Tit. Ins. Co. (1999) 73 Cal.App.4th 668, 677.) While
it is the trustee who formally initiates the nonjudicial foreclosure, by recording first a notice of
default and then a notice of sale, the trustee may take these steps only at the direction of the
person or entity that currently holds the note and the beneficial interest under the deed of trust-the
original beneficiary or its assignee-or that entitys agent. ( 2924, subd. (a)(1) [notice of default
may be filed for record only by [t]he trustee, mortgagee, or beneficiary]; Kachlon v. Markowitz
(2008) 168 Cal.App.4th 316, 334 [when borrower defaults on the debt, the beneficiary may
declare a default and make a demand on the trustee to commence foreclosure]; Santens v. Los
Angeles Finance Co. (1949) 91 Cal.App.2d 197, 202 [only a person entitled to enforce the note
can foreclose on the deed of trust].)
Defendants emphasize, correctly, that a borrower can generally raise no objection to
assignment of the note and deed of trust. A promissory note is a negotiable instrument the lender
may sell without notice to the borrower. (Creative Ventures, LLC v. Jim Ward & Associates (2011)
195 Cal.App.4th 1430, 14451446.) The deed of trust, moreover, is inseparable from the note it
secures, and follows it even without a separate assignment. ( 2936; Cockerell v. Title Ins. & Trust
Co. (1954) 42 Cal.2d 284, 291; U.S. v. Thornburg (9th Cir. 1996) 82 F.3d 886, 892.) In accordance
with this general law, the note and deed of trust in this case provided for their possible
assignment.

A deed of trust may thus be assigned one or multiple times over the life of the loan it
secures. But if the borrower defaults on the loan, only the current beneficiary may direct the
trustee to undertake the nonjudicial foreclosure process. [O]nly the true owner or beneficial
holder of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law. (
Barrionuevo v. Chase Bank, N.A. (N.D.Cal. 2012) 885 F.Supp.2d 964, 972; see Herrera v.
Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1378 [bank and reconveyance
company failed to establish they were current beneficiary and trustee, respectively, and therefore
failed to show they had authority to conduct the foreclosure sale]; cf. U.S. Bank Nat. Assn. v.
Ibanez (Mass. 2011) 941 N.E.2d 40, 51 [under Mass. law, only the original mortgagee or its
assignee may conduct nonjudicial foreclosure sale].)
In itself, the principle that only the entity currently entitled to enforce a debt may foreclose on
the mortgage or deed of trust securing that debt is not, or at least should not be, controversial. It is
a straightforward application[] of well-established commercial and real-property law: a party
cannot foreclose on a mortgage unless it is the mortgagee (or its agent). (Levitin, The Paper
Chase: Securitization, Foreclosure, and the Uncertainty of Mortgage Title (2013) 63 Duke L.J. 637,
640.) Describing the copious litigation arising out of the recent foreclosure crisis, a pair of
commentators explained: While plenty of uncertainty existed, one concept clearly emerged from
litigation during the 2008 2012 period: in order to foreclose a mortgage by judicial action, one had
to have the right to enforce the debt that the mortgage secured. It is hard to imagine how this
notion could be controversial. (Whitman & Milner, Foreclosing on Nothing: The Curious Problem
of the Deed of Trust Foreclosure Without Entitlement to Enforce the Note (2013) 66 Ark. L.Rev.
21, 23, fn. omitted.)
More subject to dispute is the question presented here: under what circumstances, if any,
may the borrower challenge a nonjudicial foreclosure on the ground that the foreclosing party is
not a valid assignee of the original lender? Put another way, does the borrower have standing to
challenge the validity of an assignment to which he or she was not a party?[3] We proceed to that
issue.
II. Borrower Standing to Challenge an Assignment as Void
A beneficiary or trustee under a deed of trust who conducts an illegal, fraudulent or willfully
oppressive sale of property may be liable to the borrower for wrongful foreclosure. (Chavez v.
Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062; Munger v. Moore (1970) 11
Cal.App.3d 1, 7.)[4] A foreclosure initiated by one with no authority to do so is wrongful for
purposes of such an action. (Barrionuevo v. Chase Bank, N.A., supra, 885 F.Supp.2d at pp.
973974; Ohlendorf v. American Home Mortgage Servicing (E.D.Cal. 2010) 279 F.R.D. 575,
582583.) As explained in part I, ante, only the original beneficiary, its assignee or an agent of one
of these has the authority to instruct the trustee to initiate and complete a nonjudicial foreclosure
sale. The question is whether and when a wrongful foreclosure plaintiff may challenge the
authority of one who claims it by assignment.
In Glaski, supra, 218 Cal.App.4th 1079, 10941095, the court held a borrower may base a
wrongful foreclosure claim on allegations that the foreclosing party acted without authority
because the assignment by which it purportedly became beneficiary under the deed of trust was

not merely voidable but void. Before discussing Glaskis holdings and rationale, we review the
distinction between void and voidable transactions.
A void contract is without legal effect. (Rest.2d Contracts, 7, com. a.) It binds no one and
is a mere nullity. (Little v. CFS Service Corp. (1987) 188 Cal.App.3d 1354, 1362.) Such a
contract has no existence whatever. It has no legal entity for any purpose and neither action nor
inaction of a party to it can validate it.... (Colby v. Title Ins. and Trust Co. (1911) 160 Cal. 632,
644.) As we said of a fraudulent real property transfer in First Nat. Bank of L. A. v. Maxwell (1899)
123 Cal. 360, 371, A void thing is as no thing.
A voidable transaction, in contrast, is one where one or more parties have the power, by a
manifestation of election to do so, to avoid the legal relations created by the contract, or by
ratification of the contract to extinguish the power of avoidance. (Rest.2d Contracts, 7.) It may
be declared void but is not void in itself. (Little v. CFS Service Corp., supra, 188 Cal.App.3d at p.
1358.) Despite its defects, a voidable transaction, unlike a void one, is subject to ratification by the
parties. (Rest.2d Contracts, 7; Aronoff v. Albanese (N.Y.App.Div. 1982) 446 N.Y.S.2d 368, 370.)
In Glaski, the foreclosing entity purportedly acted for the current beneficiary, the trustee of a
securitized mortgage investment trust.[5] The plaintiff, seeking relief from the allegedly wrongful
foreclosure, claimed his note and deed of trust had never been validly assigned to the securitized
trust because the purported assignments were made after the trusts closing date. (Glaski, supra,
218 Cal.App.4th at pp. 10821087.)
The Glaski court began its analysis of wrongful foreclosure by agreeing with a federal district
court that such a cause of action could be made out where a party alleged not to be the true
beneficiary instructs the trustee to file a Notice of Default and initiate nonjudicial foreclosure. (
Glaski, supra, 218 Cal.App.4th at p. 1094, quoting Barrionuevo v. Chase Bank, N.A., supra, 885
F.Supp.2d at p. 973.) But the wrongful foreclosure plaintiff, Glaski cautioned, must do more than
assert a lack of authority to foreclose; the plaintiff must allege facts show[ing] the defendant who
invoked the power of sale was not the true beneficiary. (Glaski, at p. 1094.)
Acknowledging that a borrowers assertion that an assignment of the note and deed of trust
is invalid raises the question of the borrowers standing to challenge an assignment to which the
borrower is not a party, the Glaski court cited several federal court decisions for the proposition
that a borrower has standing to challenge such an assignment as void, though not as voidable. (
Glaski, supra, 218 Cal.App.4th at pp. 10941095.) Two of these decisions, Culhane v. Aurora
Loan Services of Nebraska (1st Cir. 2013) 708 F.3d 282 (Culhane) and Reinagel v. Deutsche
Bank Nat. Trust Co. (5th Cir. 2013) 735 F.3d 220 (Reinagel), [6] discussed standing at some
length; we will examine them in detail in a moment.
Glaski adopted from the federal decisions and a California treatise the view that a borrower can
challenge an assignment of his or her note and deed of trust if the defect asserted would void the
assignment not merely render it voidable. (Glaski, supra, 218 Cal.App.4th at p. 1095.) Cases
holding that a borrower may never challenge an assignment because the borrower was neither a
party to nor a third party beneficiary of the assignment agreement paint with too broad a brush
by failing to distinguish between void and voidable agreements. (Ibid., quoting Culhane, supra,
708 F.3d at p. 290.)

The Glaski court went on to resolve the question of whether the plaintiff had pled a defect in
the chain of assignments leading to the foreclosing party that would, if true, render one of the
necessary assignments void rather than voidable. (Glaski, supra, 218 Cal.App.4th at p. 1095.) On
this point, Glaski held allegations that the plaintiffs note and deed of trust were purportedly
transferred into the trust after the trusts closing date were sufficient to plead a void assignment
and hence to establish standing. (Glaski, at pp. 10961098.) This last holding of Glaski is not
before us. On granting plaintiffs petition for review, we limited the scope of our review to whether
the borrower [has] standing to challenge an assignment of the note and deed of trust on the basis
of defects allegedly rendering the assignment void. We did not include in our order the question of
whether a postclosing date transfer into a New York securitized trust is void or merely voidable,
and though the parties briefs address it, we express no opinion on the question here.
Returning to the question that is before us, we consider in more detail the authority Glaski
relied on for its standing holding. In Culhane, a Massachusetts home loan borrower sought relief
from her nonjudicial foreclosure on the ground that the assignment by which Aurora Loan Services
of Nebraska (Aurora) claimed authority to foreclose-a transfer of the mortgage from Mortgage
Electronic Registration Systems, Inc. (MERS), [7] to Aurora-was void because MERS never
properly held the mortgage. (Culhane, supra, 708 F.3d at pp. 286288, 291.)
Before addressing the merits of the plaintiffs allegations, the Culhane court considered
Auroras contention the plaintiff lacked standing to challenge the assignment of her mortgage from
MERS to Aurora. On this question, the court first concluded the plaintiff had a sufficient personal
stake in the outcome, having shown a concrete and personalized injury resulting from the
challenged assignment: The action challenged here relates to Auroras right to foreclose by virtue
of the assignment from MERS. The identified harm-the foreclosure-can be traced directly to
Auroras exercise of the authority purportedly delegated by the assignment. (Culhane, supra, 708
F.3d at pp. 289290.)
Culhane next considered whether the prudential principle that a litigant should not be permitted to
assert the rights and interest of another dictates that borrowers lack standing to challenge
mortgage assignments as to which they are neither parties nor third party beneficiaries. (Culhane,
supra, 708 F.3d at p. 290.) Two aspects of Massachusetts law on nonjudicial foreclosure
persuaded the court such a broad rule is unwarranted. First, only the mortgagee (that is, the
original lender or its assignee) may exercise the power of sale, [8] and the borrower is entitled to
relief from foreclosure by an unauthorized party. (Culhane, at p. 290.) Second, in a nonjudicial
foreclosure the borrower has no direct opportunity to challenge the foreclosing entitys authority in
court. Without standing to sue for relief from a wrongful foreclosure, a Massachusetts mortgagor
would be deprived of a means to assert her legal protections.... (Ibid.) These considerations led
the Culhane court to conclude a mortgagor has standing to challenge the assignment of a
mortgage on her home to the extent that such a challenge is necessary to contest a foreclosing
entitys status qua mortgagee. (Id. at p. 291.)
The court immediately cautioned that its holding was limited to allegations of a void transfer.
If, for example, the assignor had no interest to assign or had no authority to make the particular
assignment, a challenge of this sort would be sufficient to refute an assignees status qua

mortgagee. (Culhane, supra, 708 F.3d at p. 291.) But where the alleged defect in an assignment
would render it merely voidable at the election of one party but otherwise effective to pass legal
title, the borrower has no standing to challenge the assignment on that basis. (Ibid.)[9]
In Reinagel, upon which the Glaski court also relied, the federal court held that under Texas
law borrowers defending against a judicial foreclosure have standing to challenge the chain of
assignments by which a party claims a right to foreclose. (Reinagel, supra, 735 F.3d at p. 224.)
Though Texas law does not allow a nonparty to a contract to enforce the contract unless he or she
is an intended third-party beneficiary, the borrowers in this situation are not attempting to enforce
the terms of the instruments of assignment; to the contrary, they urge that the assignments are
void ab initio. (Id. at p. 225.)
Like Culhane, Reinagel distinguished between defects that render a transaction void and
those that merely make it voidable at a partys behest. Though the law is settled in Texas that an
obligor cannot defend against an assignees efforts to enforce the obligation on a ground that
merely renders the assignment voidable at the election of the assignor, Texas courts follow the
majority rule that the obligor may defend on any ground which renders the assignment void. (
Reinagel, supra, 735 F.3d at p. 225.) The contrary rule would allow an institution to foreclose on a
borrowers property though it is not a valid party to the deed of trust or promissory note.... (Ibid.)
[10]
Jenkins, on which the Court of Appeal below relied, was decided close in time to Glaski (neither
decision discusses the other) but reaches the opposite conclusion on standing. In Jenkins, the
plaintiff sued to prevent a foreclosure sale that had not yet occurred, alleging the purported
beneficiary who sought the sale held no security interest because a purported transfer of the loan
into a securitized trust was made in violation of the pooling and servicing agreement that governed
the investment trust. (Jenkins, supra, 216 Cal.App.4th at pp. 504505.)
The appellate court held a demurrer to the plaintiffs cause of action for declaratory relief was
properly sustained for two reasons. First, Jenkins held California law did not permit a preemptive
judicial action[] to challenge the right, power, and authority of a foreclosing beneficiary or
beneficiarys agent to initiate and pursue foreclosure. (Jenkins, supra, 216 Cal.App.4th at p.
511.) Relying primarily on Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149,
Jenkins reasoned that such preemptive suits are inconsistent with Californias comprehensive
statutory scheme for nonjudicial foreclosure; allowing such a lawsuit would fundamentally
undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely
for the purpose of delaying valid foreclosures. (Jenkins, at p. 513, quoting Gomes at p. 1155.)
This aspect of Jenkins, disallowing the use of a lawsuit to preempt a nonjudicial foreclosure,
is not within the scope of our review, which is limited to a borrowers standing to challenge an
assignment in an action seeking remedies for wrongful foreclosure. As framed by the proceedings
below, the concrete question in the present case is whether plaintiff should be permitted to amend
her complaint to seek redress, in a wrongful foreclosure count, for the trustees sale that has
already taken place. We do not address the distinct question of whether, or under what
circumstances, a borrower may bring an action for injunctive or declaratory relief to prevent a
foreclosure sale from going forward.

Second, as an alternative ground, Jenkins held a demurrer to the declaratory relief claim was
proper because the plaintiff had failed to allege an actual controversy as required by Code of Civil
Procedure section 1060. (Jenkins, supra, 216 Cal.App.4th at p. 513.) The plaintiff did not dispute
that her loan could be assigned or that she had defaulted on it and remained in arrears. (Id. at p.
514.) Even if one of the assignments of the note and deed of trust was improper in some respect,
the appellate court reasoned, Jenkins is not the victim of such invalid transfer[] because her
obligations under the note remained unchanged. Instead, the true victim may be an individual or
entity that believes it has a present beneficial interest in the promissory note and may suffer the
unauthorized loss of its interest in the note. (Id. at p. 515.) In particular, the plaintiff could not
complain about violations of the securitized trusts transfer rules: As an unrelated third party to the
alleged securitization, and any other subsequent transfers of the beneficial interest under the
promissory note, Jenkins lacks standing to enforce any agreements, including the investment
trusts pooling and servicing agreement, relating to such transactions. (Ibid.)
For its conclusion on standing, Jenkins cited In re Correia (Bankr. 1st Cir. 2011) 452 B.R.
319. The borrowers in that case challenged a foreclosure on the ground that the assignment of
their mortgage into a securitized trust had not been made in accordance with the trusts pooling
and servicing agreement (PSA). (Id. at pp. 321322.) The appellate court held the borrowers
lacked standing to challenge the mortgages chain of title under the PSA. (Id. at p. 324.) Being
neither parties nor third party beneficiaries of the pooling agreement, they could not complain of a
failure to abide by its terms. (Ibid.)
Jenkins also cited Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495,
which primarily addressed the merits of a foreclosure challenge, concluding the borrowers had
adduced no facts on which they could allege an assignment from MERS to another beneficiary
was invalid. (Id. at pp. 15021506.) In reaching the merits, the court did not explicitly discuss the
plaintiffs standing to challenge the assignment. In a passage cited in Jenkins, however, the court
observed that the plaintiffs, in order to state a wrongful foreclosure claim, needed to show
prejudice, and they could not do so because the challenged assignment did not change their
obligations under the note. (Herrera, at pp. 15071508.) Even if MERS lacked the authority to
assign the deed of trust, the true victims were not plaintiffs but the lender. (Id. at p. 1508.)
On the narrow question before us-whether a wrongful foreclosure plaintiff may challenge an
assignment to the foreclosing entity as void-we conclude Glaski provides a more logical answer
than Jenkins. As explained in part I, ante, only the entity holding the beneficial interest under the
deed of trust-the original lender, its assignee, or an agent of one of these-may instruct the trustee
to commence and complete a nonjudicial foreclosure. ( 2924, subd. (a)(1); Barrionuevo v. Chase
Bank, N.A., supra, 885 F.Supp.2d at p. 972.) If a purported assignment necessary to the chain by
which the foreclosing entity claims that power is absolutely void, meaning of no legal force or
effect whatsoever (Colby v. Title Ins. and Trust Co., supra, 160 Cal. at p. 644; Rest.2d Contracts,
7, com. a), the foreclosing entity has acted without legal authority by pursuing a trustees sale,
and such an unauthorized sale constitutes a wrongful foreclosure. (Barrionuevo v. Chase Bank,
N.A., at pp. 973974.)
Like the Massachusetts borrowers considered in Culhane, whose mortgages contained a

power of sale allowing for nonjudicial foreclosure, California borrowers whose loans are secured
by a deed of trust with a power of sale may suffer foreclosure without judicial process and thus
would be deprived of a means to assert [their] legal protections if not permitted to challenge the
foreclosing entitys authority through an action for wrongful foreclosure. (Culhane, supra, 708 F.3d
at p. 290.) A borrower therefore has standing to challenge the assignment of a mortgage on her
home to the extent that such a challenge is necessary to contest a foreclosing entitys status qua
mortgagee (id. at p. 291)-that is, as the current holder of the beneficial interest under the deed of
trust. (Accord, Wilson v. HSBC Mortgage Servs., Inc. (1st Cir. 2014) 744 F.3d 1, 9 [A homeowner
in Massachusetts-even when not a party to or third party beneficiary of a mortgage assignmenthas standing to challenge that assignment as void because success on the merits would prove the
purported assignee is not, in fact, the mortgagee and therefore lacks any right to foreclose on the
mortgage.].)[11]
Jenkins and other courts denying standing have done so partly out of concern with allowing a
borrower to enforce terms of a transfer agreement to which the borrower was not a party. In
general, California law does not give a party personal standing to assert rights or interests
belonging solely to others.[12] (See Code Civ. Proc., 367 [action must be brought by or on
behalf of the real party in interest]; Jasmine Networks, Inc. v. Superior Court (2009) 180
Cal.App.4th 980, 992.) When an assignment is merely voidable, the power to ratify or avoid the
transaction lies solely with the parties to the assignment; the transaction is not void unless and
until one of the parties takes steps to make it so. A borrower who challenges a foreclosure on the
ground that an assignment to the foreclosing party bore defects rendering it voidable could thus be
said to assert an interest belonging solely to the parties to the assignment rather than to herself.
When the plaintiff alleges a void assignment, however, the Jenkins courts concern with
enforcement of a third partys interests is misplaced. Borrowers who challenge the foreclosing
partys authority on the grounds of a void assignment are not attempting to enforce the terms of
the instruments of assignment; to the contrary, they urge that the assignments are void ab initio. (
Reinagel, supra, 735 F.3d at p. 225; accord, Mruk v. Mortgage Elec. Registration Sys., Inc. (R.I.
2013) 82 A.3d 527, 536 [borrowers challenging an assignment as void are not attempting to
assert the rights of one of the contracting parties; instead, the homeowners are asserting their own
rights not to have their homes unlawfully foreclosed upon].)
Unlike a voidable transaction, a void one cannot be ratified or validated by the parties to it
even if they so desire. (Colby v. Title Ins. and Trust Co., supra, 160 Cal. at p. 644; Aronoff v.
Albanese, supra, 446 N.Y.S.2d at p. 370.) Parties to a securitization or other transfer agreement
may well wish to ratify the transfer agreement despite any defects, but no ratification is possible if
the assignment is void ab initio. In seeking a finding that an assignment agreement was void,
therefore, a plaintiff in Yvanovas position is not asserting the interests of parties to the
assignment; she is asserting her own interest in limiting foreclosure on her property to those with
legal authority to order a foreclosure sale. This, then, is not a situation in which standing to sue is
lacking because its sole object... is to settle rights of third persons who are not parties. (Golden
Gate Bridge etc. Dist. v. Felt (1931) 214 Cal. 308, 316.)
Defendants argue a borrower who is in default on his or her loan suffers no prejudice from

foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed
of trust could equally well have foreclosed on the property. As the Jenkins court put it, when an
invalid transfer of a note and deed of trust leads to foreclosure by an unauthorized party, the
victim is not the borrower, whose obligations under the note are unaffected by the transfer, but
an individual or entity that believes it has a present beneficial interest in the promissory note and
may suffer the unauthorized loss of its interest in the note. (Jenkins, supra, 216 Cal.App.4th at p.
515; see also Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75,
85 [borrowers had no standing to challenge assignment by MERS where they do not dispute they
are in default and there is no reason to believe... the original lender would have refrained from
foreclosure in these circumstances]; Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th
at p. 272 [wrongful foreclosure plaintiff could not show prejudice from allegedly invalid assignment
by MERS as the assignment merely substituted one creditor for another, without changing her
obligations under the note].)
In deciding the limited question on review, we are concerned only with prejudice in the sense
of an injury sufficiently concrete and personal to provide standing, not with prejudice as a possible
element of the wrongful foreclosure tort. (See fn. 4, ante.) As it relates to standing, we disagree
with defendants analysis of prejudice from an illegal foreclosure. A foreclosed-upon borrower
clearly meets the general standard for standing to sue by showing an invasion of his or her legally
protected interests (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175)-the borrower
has lost ownership to the home in an allegedly illegal trustees sale. (See Culhane, supra, 708
F.3d at p. 289 [foreclosed-upon borrower has sufficient personal stake in action against
foreclosing entity to meet federal standing requirement].) Moreover, the bank or other entity that
ordered the foreclosure would not have done so absent the allegedly void assignment. Thus [t]he
identified harm-the foreclosure-can be traced directly to [the foreclosing entitys] exercise of the
authority purportedly delegated by the assignment. (Culhane, at p. 290.)
Nor is it correct that the borrower has no cognizable interest in the identity of the party
enforcing his or her debt. Though the borrower is not entitled to object to an assignment of the
promissory note, he or she is obligated to pay the debt, or suffer loss of the security, only to a
person or entity that has actually been assigned the debt. (See Cockerell v. Title Ins. & Trust Co.,
supra, 42 Cal.2d at p. 292 [party claiming under an assignment must prove fact of assignment].)
The borrower owes money not to the world at large but to a particular person or institution, and
only the person or institution entitled to payment may enforce the debt by foreclosing on the
security.
It is no mere procedural nicety, from a contractual point of view, to insist that only those
with authority to foreclose on a borrower be permitted to do so. (Levitin, The Paper Chase:
Securitization, Foreclosure, and the Uncertainty of Mortgage Title, supra, 63 Duke L.J. at p. 650.)
Such a view fundamentally misunderstands the mortgage contract. The mortgage contract is not
simply an agreement that the home may be sold upon a default on the loan. Instead, it is an
agreement that if the homeowner defaults on the loan, the mortgagee may sell the property
pursuant to the requisite legal procedure. (Ibid., italics added and omitted.)
The logic of defendants no-prejudice argument implies that anyone, even a stranger to the

debt, could declare a default and order a trustees sale-and the borrower would be left with no
recourse because, after all, he or she owed the debt to someone, though not to the foreclosing
entity. This would be an odd result indeed. (Reinagel, supra, 735 F.3d at p. 225.) As a district
court observed in rejecting the no-prejudice argument, [b]anks are neither private attorneys
general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners
and take away their homes in satisfaction of some other banks deed of trust. (Miller v.
Homecomings Financial, LLC (S.D.Tex. 2012) 881 F.Supp.2d 825, 832.)
Defendants note correctly that a plaintiff in Yvanovas position, having suffered an allegedly
unauthorized nonjudicial foreclosure of her home, need not now fear another creditor coming
forward to collect the debt. The home can only be foreclosed once, and the trustees sale
extinguishes the debt. (Code Civ. Proc., 580d; Dreyfuss v. Union Bank of California, supra, 24
Cal.4th at p. 411.) But as the Attorney General points out in her amicus curiae brief, a holding that
anyone may foreclose on a defaulting home loan borrower would multiply the risk for homeowners
that they might face a foreclosure at some point in the life of their loans. The possibility that
multiple parties could each foreclose at some time, that is, increases the borrowers overall risk of
foreclosure.
Defendants suggest that to establish prejudice the plaintiff must allege and prove that the
true beneficiary under the deed of trust would have refrained from foreclosing on the plaintiffs
property. Whatever merit this rule would have as to prejudice as an element of the wrongful
foreclosure tort, it misstates the type of injury required for standing. A homeowner who has been
foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal
rights at the foreclosing entitys hands. No more is required for standing to sue. (Angelucci v.
Century Supper Club, supra, 41 Cal.4th at p. 175.)
Neither Caulfield v. Sanders (1861) 17 Cal. 569 nor Seidell v. Tuxedo Land Co. (1932) 216
Cal. 165, upon which defendants rely, holds or implies a home loan borrower may not challenge a
foreclosure by alleging a void assignment. In the first of these cases, we held a debtor on a
contract for printing and advertising could not defend against collection of the debt on the ground it
had been assigned without proper consultation among the assigning partners and for nominal
consideration: It is of no consequence to the defendant, as it in no respect affects his liability,
whether the transfer was made at one time or another, or with or without consideration, or by one
or by all the members of the firm. (Caulfield v. Sanders, at p. 572.) In the second, we held
landowners seeking to enjoin a foreclosure on a deed of trust to their land could not do so by
challenging the validity of an assignment of the promissory note the deed of trust secured. (
Seidell v. Tuxedo Land Co., at pp. 166, 169170.) We explained that the assignment was made by
an agent of the beneficiary, and that despite the landowners claim the agent lacked authority for
the assignment, the beneficiary is not now complaining. (Id. at p. 170.) Neither decision
discusses the distinction between allegedly void and merely voidable, and neither negates a
borrowers ability to challenge an assignment of his or her debt as void.
For these reasons, we conclude Glaski, supra, 218 Cal.App.4th 1079, was correct to hold a
wrongful foreclosure plaintiff has standing to claim the foreclosing entitys purported authority to
order a trustees sale was based on a void assignment of the note and deed of trust. Jenkins,

supra, 216 Cal.App.4th 497, spoke too broadly in holding a borrower lacks standing to challenge
an assignment of the note and deed of trust to which the borrower was neither a party nor a third
party beneficiary. Jenkinss rule may hold as to claimed defects that would make the assignment
merely voidable, but not as to alleged defects rendering the assignment absolutely void.[13]
In embracing Glaskis rule that borrowers have standing to challenge assignments as void,
but not as voidable, we join several courts around the nation. (Wilson v. HSBC Mortgage Servs.,
Inc., supra, 744 F.3d at p. 9; Reinagel, supra, 735 F.3d at pp. 224225; Woods v. Wells Fargo
Bank, N.A. (1st Cir. 2013) 733 F.3d 349, 354; Culhane, supra, 708 F.3d at pp. 289291; Miller v.
Homecomings Financial, LLC, supra, 881 F.Supp.2d at pp. 831832; Bank of America Nat. Assn.
v. Bassman FBT, LLC, supra, 981 N.E.2d at pp. 78; Pike v. Deutsche Bank Nat. Trust Co. (N.H.
2015) 121 A.3d 279, 281; Mruk v. Mortgage Elec. Registration Sys., Inc., supra, 82 A.3d at pp.
534536; Dernier v. Mortgage Network, Inc. (Vt. 2013) 87 A.3d 465, 473.) Indeed, as
commentators on the issue have stated: [C]ourts generally permit challenges to assignments if
such challenges would prove that the assignments were void as opposed to voidable. (Zacks &
Zacks, Not a Party: Challenging Mortgage Assignments (2014) 59 St. Louis U. L.J. 175, 180.)
That several federal courts applying California law have, largely in unreported decisions,
agreed with Jenkins and declined to follow Glaski does not alter our conclusion. Neither Khan v.
Recontrust Co. (N.D.Cal. 2015) 81 F.Supp.3d 867 nor Flores v. EMC Mort. Co. (E.D.Cal. 2014)
997 F.Supp.2d 1088 adds much to the discussion. In Khan, the district court found the borrower,
as a nonparty to the pooling and servicing agreement, lacked standing to challenge a foreclosure
on the basis of an unspecified flaw in the loans securitization; the courts opinion does not discuss
the distinction between a void assignment and a merely voidable one. (Khan v. Recontrust Co.,
supra, 81 F.Supp.3d at pp. 872873.) In Flores, the district court, considering a wrongful
foreclosure complaint that lacked sufficient clarity in its allegations including identification of the
assignment or assignments challenged, the district court quoted and followed Jenkinssreasoning
on the borrowers lack of standing to enforce an agreement to which he or she is not a party,
without addressing the application of this reasoning to allegedly void assignments. (Flores v. EMC
Mort. Co., supra, at pp. 11031105.)
Similarly, the unreported federal decisions applying California law largely fail to grapple with
Glaskis distinction between void and voidable assignments and tend merely to repeat Jenkinss
arguments that a borrower, as a nonparty to an assignment, may not enforce its terms and cannot
show prejudice when in default on the loan, arguments we have found insufficient with regard to
allegations of void assignments. While unreported federal court decisions may be cited in
California as persuasive authority (Kan v. Guild Mortgage Co. (2014) 230 Cal.App.4th 736, 744,
fn. 3), in this instance they lack persuasive value.
Defendants cite the decision in Rajamin v. Deutsche Bank Nat. Trust Co. (2nd Cir. 2014) 757
F.3d 79 (Rajamin), as a rebuke of Glaski. Rajamins expressed disagreement with Glaski,
however, was on the question whether, under New York law, an assignment to a securitized trust
made after the trusts closing date is void or merely voidable. (Rajamin, at p. 90.) As explained
earlier, that question is outside the scope of our review and we express no opinion as to Glaskis
correctness on the point.

The Rajamin court did, in an earlier discussion, state generally that borrowers lack standing
to challenge an assignment as violative of the securitized trusts pooling and servicing agreement (
Rajamin, supra, 757 F.3d at pp. 8586), but the court in that portion of its analysis did not
distinguish between void and voidable assignments. In a later portion of its analysis, the court
assum[ed] that standing exists for challenges that contend that the assigning party never
possessed legal title, a defect the plaintiffs claimed made the assignments void (id. at p. 90), but
concluded the plaintiffs had not properly alleged facts to support their voidness theory (id. at pp.
9091).
Nor do Kan v. Guild Mortgage Co., supra, 230 Cal.App.4th 736, and Siliga v. Mortgage
Electronic Registration Systems, Inc., supra, 219 Cal.App.4th 75 (Siliga), which defendants also
cite, persuade us Glaski erred in finding borrower standing to challenge an assignment as void.
The Kan court distinguished Glaski as involving a postsale wrongful foreclosure claim, as opposed
to the preemptive suits involved in Jenkins and Kan itself. (Kan, at pp. 743744.) On standing, the
Kan court noted the federal criticism of Glaski and our grant of review in the present case, but
found no reason to wade into the issue of whether Glaski was correctly decided, because the
opinion has no direct applicability to this preforeclosure action. (Kan, at p. 745.)
Siliga, similarly, followed Jenkins in disapproving a preemptive lawsuit. (Siliga, supra, 219
Cal.App.4th at p. 82.) Without discussing Glaski, the Siliga court also held the borrower plaintiffs
failed to show any prejudice from, and therefore lacked standing to challenge, the assignment of
their deed of trust to the foreclosing entity. (Siliga, at p. 85.) As already explained, this prejudice
analysis misses the mark in the wrongful foreclosure context. When a property has been sold at a
trustees sale at the direction of an entity with no legal authority to do so, the borrower has
suffered a cognizable injury.
In further support of a borrowers standing to challenge the foreclosing partys authority,
plaintiff points to provisions of the recent legislation known as the California Homeowner Bill of
Rights, enacted in 2012 and effective only after the trustees sale in this case. (See Leuras v. BAC
Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86, fn. 14.)[14] Having concluded without
reference to this legislation that borrowers do have standing to challenge an assignment as void,
we need not decide whether the new provisions provide additional support for that holding.
Plaintiff has alleged that her deed of trust was assigned to the Morgan Stanley investment
trust in December 2011, several years after both the securitized trusts closing date and New
Centurys liquidation in bankruptcy, a defect plaintiff claims renders the assignment void. Beyond
their general claim a borrower has no standing to challenge an assignment of the deed of trust,
defendants make several arguments against allowing plaintiff to plead a cause of action for
wrongful foreclosure based on this allegedly void assignment.
Principally, defendants argue the December 2011 assignment of the deed of trust to
Deutsche Bank, as trustee for the investment trust, was merely confirmatory of a 2007
assignment that had been executed in blank (i.e., without designation of assignee) when the loan
was added to the trusts investment pool. The purpose of the 2011 recorded assignment,
defendants assert, was merely to comply with a requirement in the trusts pooling and servicing
agreement that documents be recorded before foreclosures are initiated. An amicus curiae

supporting defendants position asserts that the general practice in home loan securitization is to
initially execute assignments of loans and mortgages or deeds of trust to the trustee in blank and
not to record them; the mortgage or deed of trust is subsequently endorsed by the trustee and
recorded if and when state law requires. (See Rajamin, supra, 757 F.3d at p. 91.) This claim,
which goes not to the legal issue of a borrowers standing to sue for wrongful foreclosure based on
a void assignment, but rather to the factual question of when the assignment in this case was
actually made, is outside the limited scope of our review. The same is true of defendants
remaining factual claims, including that the text of the investment trusts pooling and servicing
agreement demonstrates plaintiffs deed of trust was assigned to the trust before it closed.
Conclusion
We conclude a home loan borrower has standing to claim a nonjudicial foreclosure was
wrongful because an assignment by which the foreclosing party purportedly took a beneficial
interest in the deed of trust was not merely voidable but void, depriving the foreclosing party of any
legitimate authority to order a trustees sale. The Court of Appeal took the opposite view and,
solely on that basis, concluded plaintiff could not amend her operative complaint to plead a cause
of action for wrongful foreclosure. We must therefore reverse the Court of Appeals judgment and
allow that court to reconsider the question of an amendment to plead wrongful foreclosure. We
express no opinion on whether plaintiff has alleged facts showing a void assignment, or on any
other issue relevant to her ability to state a claim for wrongful foreclosure.
Disposition
The judgment of the Court of Appeal is reversed and the matter is remanded to that court for
further proceedings consistent with our opinion.
We Concur: Cantil-Sakauye, C. J., Corrigan, J., Liu, J., Cullar, J., Kruger, J., Huffman, J. [*]
--------Notes:
[1] The superior court granted defendants request for judicial notice of the recorded deed of trust,
assignment of the deed of trust, substitution of trustee, notices of default and of trustees sale, and
trustees deed upon sale. The existence and facial contents of these recorded documents were
properly noticed in the trial court under Evidence Code sections 452, subdivisions (c) and (h), and
453. (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264266.) Under
Evidence Code section 459, subdivision (a), notice by this court is therefore mandatory. We
therefore take notice of their existence and contents, though not of disputed or disputable facts
stated therein. (See Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1102.)
[2]All further unspecified statutory references are to the Civil Code.
[3] Somewhat confusingly, both the purported assignees authority to foreclose and the borrowers
ability to challenge that authority have been framed as questions of standing. (See, e.g., Levitin,
The Paper Chase: Securitization, Foreclosure, and the Uncertainty of Mortgage Title, supra, 63
Duke L.J. at p. 644 [discussing purported assignees standing to foreclose]; Jenkins, supra, 216
Cal.App.4th at p. 515 [borrower lacks standing to enforce [assignment] agreements to which he
or she is not a party]; Bank of America Nat. Assn. v. Bassman FBT, LLC (Ill.App. Ct. 2012) 981
N.E.2d 1, 7 [Each party contends that the other lacks standing.].) We use the term here in the

latter sense of a borrowers legal authority to challenge the validity of an assignment.

[4] It has been held that, at least when seeking to set aside the foreclosure sale, the plaintiff must
also show prejudice and a tender of the amount of the secured indebtedness, or an excuse of
tender. (Chavez v. Indymac Mortgage Services, supra, 219 Cal.App.4th at p. 1062.) Tender has
been excused when, among other circumstances, the plaintiff alleges the foreclosure deed is
facially void, as arguably is the case when the entity that initiated the sale lacked authority to do
so. (Ibid.; In re Cedano (Bankr. 9th Cir. 2012) 470 B.R. 522, 529530; Lester v. J.P. Morgan
Chase Bank (N.D.Cal. 2013) 926 F.Supp.2d 1081, 1093; Barrionuevo v. Chase Bank, N.A., supra
, 885 F.Supp.2d 964, 969970.) Our review being limited to the standing question, we express no
opinion as to whether plaintiff Yvanova must allege tender to state a cause of action for wrongful
foreclosure under the circumstances of this case. Nor do we discuss potential remedies for a
plaintiff in Yvanovas circumstances; at oral argument, plaintiffs counsel conceded she seeks only
damages. As to prejudice, we do not address it as an element of wrongful foreclosure. We do,
however, discuss whether plaintiff has suffered a cognizable injury for standing purposes.
[5] The mortgage securitization process has been concisely described as follows: To raise funds
for new mortgages, a mortgage lender sells pools of mortgages into trusts created to receive the
stream of interest and principal payments from the mortgage borrowers. The right to receive trust
income is parceled into certificates and sold to investors, called certificateholders. The trustee
hires a mortgage servicer to administer the mortgages by enforcing the mortgage terms and
administering the payments. The terms of the securitization trusts as well as the rights, duties, and
obligations of the trustee, seller, and servicer are set forth in a Pooling and Servicing Agreement
(PSA). (BlackRock Financial Mgmt. v. Ambac Assur. Corp. (2d Cir. 2012) 673 F.3d 169, 173.)
[6] The version of Reinagel cited in Glaski, published at 722 F.3d 700, was amended on rehearing
and superseded by Reinagel, supra, 735 F.3d 220.
[7]As the Culhane court explained, MERS was formed by a consortium of residential mortgage
lenders and investors to streamline the transfer of mortgage loans and thereby facilitate their
securitization. A member lender may name MERS as mortgagee on a loan the member originates
or owns; MERS acts solely as the lenders nominee, having legal title but no beneficial interest
in the loan. When a loan is assigned to another MERS member, MERS can execute the transfer
by amending its electronic database. When the loan is assigned to a nonmember, MERS executes
the assignment and ends its involvement. (Culhane, supra, 708 F.3d at p. 287.)
[8] Massachusetts General Laws chapter 183, section 21, similarly to our Civil Code section 2924,
provides that the power of sale in a mortgage may be exercised by the mortgagee or his
executors, administrators, successors or assigns.
[9] On the merits, the Culhane court rejected the plaintiffs claim that MERS never properly held
her mortgage, giving her standing to challenge the assignment from MERS to Aurora as void (
Culhane, supra, 708 F.3d at p. 291); the court held MERSs role as the lenders nominee allowed it
to hold and assign the mortgage under Massachusetts law. (Id. at pp. 291293.)
[10] The Reinagel court nonetheless rejected the plaintiffs claim of an invalid assignment after the
closing date of a securitized trust, observing they could not enforce the terms of trust because they
were not intended third-party beneficiaries. The courts holding appears, however, to rest at least

in part on its conclusion that a violation of the closing date would not render the assignments
void but merely allow them to be avoided at the behest of a party or third-party beneficiary. (
Reinagel, supra, 735 F.3d at p. 228.) As discussed above in relation to Glaski, that question is not
within the scope of our review.
[11] We cite decisions on federal court standing only for their persuasive value in determining what
California standing law should be, without any assumption that standing in the two systems is
identical. The California Constitution does not impose the same case-or-controversy limit on
state courts jurisdiction as article III of the United States Constitution does on federal courts. (
Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1117, fn. 13.)
[12] In speaking of personal standing to sue, we set aside such doctrines as taxpayer standing to
seek injunctive relief (see Code Civ. Proc., 526a) and public right/public duty standing to
seek a writ of mandate (see Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52
Cal.4th 155, 166).
[13] We disapprove Jenkins v. JPMorgan Chase Bank, N.A., supra, 216 Cal.App.4th 497, Siliga v.
Mortgage Electronic Registration Systems, Inc., supra, 219 Cal.App.4th 75, Fontenot v. Wells
Fargo Bank, N.A., supra, 198 Cal.App.4th 256, and Herrera v. Federal National Mortgage Assn.,
supra, 205 Cal.App.4th 1495, to the extent they held borrowers lack standing to challenge an
assignment of the deed of trust as void.
[14] Plaintiff cites newly added provisions that prohibit any entity from initiating a foreclosure
process unless it is the holder of the beneficial interest under the mortgage or deed of trust, the
original trustee or the substituted trustee under the deed of trust, or the designated agent of the
holder of the beneficial interest ( 2924, subd. (a)(6)); require the loan servicer to inform the
borrower, before a notice of default is filed, of the borrowers right to request copies of any
assignments of the deed of trust required to demonstrate the right of the mortgage servicer to
foreclose ( 2923.55, subd. (b)(1)(B)(iii)); and require the servicer to ensure the documentation
substantiates the right to foreclose ( 2924.17, subd. (b)). The legislative history indicates the
addition of these provisions was prompted in part by reports that nonjudicial foreclosure
proceedings were being initiated on behalf of companies with no authority to foreclose. (See Sen.
Rules Com., Conference Rep. on Sen. Bill No. 900 (20112012 Reg. Sess.) as amended June 27,
2012, p. 26.)
[*] Associate Justice of the Court of Appeal, Fourth Appellate District, Division One, assigned by
the Chief Justice pursuant to article VI, section 6 of the California Constitution.
---------